Legal Uncertainty Clouds ETM’s Kvanefjeld Project as Lithium Prospects Await Market Clarity

Renewed Focus on Kvanefjeld Project

Energy Transition Minerals Ltd (ASX: ETM) has signalled a strategic recommitment to its flagship Kvanefjeld Rare Earths Project in southern Greenland. The company has intensified efforts to foster transparent dialogue and cooperative relationships with the Greenlandic community, government, and stakeholders. This includes the recent appointment of Mr Svend Hardenberg, a seasoned Greenlandic entrepreneur and advisor, to the board of its Greenland subsidiary, Greenland Minerals A/S (GMAS). The ETM board plans to visit Nuuk and Narsaq in early 2025 to deepen engagement with local authorities and stakeholders.

This renewed focus comes amid complex legal challenges surrounding the project’s exploitation licence. GMAS has been embroiled in arbitration proceedings since 2022, with a bifurcation ordered in September 2024 to first determine the tribunal’s jurisdiction. Parallel legal actions in Greenlandic and Danish courts aim to consolidate and protect GMAS’ rights, with key hearings scheduled for mid-2025. The outcomes of these proceedings remain pivotal for the project’s future.

Environmental and Community Engagement Progress

During the northern summer of 2024, GMAS completed a comprehensive environmental monitoring program on the Kvanefjeld Exploration Licence. Activities included weather, hydrology, dust, and water quality monitoring, alongside biota sampling in terrestrial and aquatic environments around Narsaq and Kvanefjeld. The company engaged local personnel and collaborated with expert consultants such as WSP Danmark A/S and the Norwegian Institute for Air Research (NILU) to ensure rigorous data collection and analysis.

These efforts culminated in a detailed field report submitted to the Mineral Licence and Safety Authority (MLSA), demonstrating ETM’s commitment to regulatory compliance and environmental stewardship. Such transparency is critical in maintaining community trust and regulatory goodwill amid the ongoing legal uncertainties.

Lithium Exploration in Canada and Spain

Beyond Greenland, ETM continues to advance its lithium exploration portfolio. In Quebec’s James Bay region, the company is assessing assay results from its 100%-owned Solo and Good Setting projects. The initial reconnaissance identified promising lithium-caesium-tantalum (LCT) pegmatites, with abundant large-scale pegmatites indicating potential mineralisation at depth. However, no on-ground activities occurred in the December quarter as ETM evaluates market conditions and future exploration strategies.

In Spain, the Villasrubias lithium project in Salamanca remains in the planning and assessment phase. Having completed sufficient exploration to meet licence renewal requirements, ETM anticipates extending its permit for another three years in May 2025. The company previously reported encouraging results from its second drilling campaign in mid-2024, underscoring the project’s early-stage potential.

Financial Position and Outlook

ETM’s December quarter cash flow report reveals continued investment in exploration and evaluation activities, with a net cash outflow of approximately A$478,000 from operations and A$1.365 million on exploration and evaluation. The company ended the quarter with nearly A$12 million in cash and equivalents, providing an estimated 6.5 quarters of funding at current expenditure levels. Director salaries and fees accounted for A$282,000 of payments during the period.

While the legal proceedings in Greenland introduce uncertainty, ETM’s diversified project base and disciplined financial management position it to navigate these challenges. The company’s proactive community engagement and environmental diligence at Kvanefjeld may prove instrumental in securing long-term project viability.